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Home is where…….the cash is

Home is where…….the cash is

Category: Savings

Updated: 06/01/2011
First Published: 06/01/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Home has long been where the heart is for Britons, but it is also where we are storing billions of pounds in cash.

The average amount kept at home, excluding cash in wallets, is just over £280, according to the Financial Services Compensation Scheme (FSCS).

It means that across the UK's almost 25 million households, more than £7 billion in hard, cold cash is being stowed away.

While 37% of those questioned say they have less than £20 at home, 4% said they had over £1,000 lying around the house. This included 1% who admitted to stashing more than £10,000 at home.

Perceived poor value in the savings market is partially to blame, as a third of those that keep cash at home said they see no point in depositing money with a bank or building society when interest rates are at an historical low.

While interest rates are low, there are still some savings accounts that offer value.

In the fixed rate market – ever popular with savers – the Post Office is currently offering a cracking rate of 3.00%, while those looking to tie their money away for longer can get 3.55% with Santander's two year bond.

Long term savers prepared to lock their funds in for five years can get a mouth watering 4.50% rate from the State Bank of India and Saga.

"Even though rates are currently low, those wishing to save money should always do so with a bank, building society or credit union which is covered by the FSA, the UK financial regulator," said Mark Neale, chief executive of the FSCS.

"It is vital that savers know their money is protected up to the new limit of £85,000.

"By contrast, those deciding to keep money at home, whether as savings or for convenience, may not be covered by household insurance in instances such as burglary.

"Under new rules, if a financial institution were to fail most customers will get their money in a few weeks, so there really is no need to stash it at home."

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